Manulife US Reit secures six cornerstone investors ahead of S$629m Singapore IPO

MANULIFE US Real Estate Investment Trust (Manulife US Reit), a unit of Canadian insurer Manulife Financial Corporation, has secured six cornerstone investors ahead of its S$629 million initial public offering (IPO) in Singapore, the Wall Street Journal has reported.

The US Reit, which is set to launch its IPO in Singapore in the second half of 2015, has already lodged its preliminary IPO prospectus with the Monetary Authority of Singapore.

The prospectus shows that the company plans to sell 694.4 million units at a fixed price of S$0.82 apiece in its offering, and raise S$629 million in gross proceeds. It also plans to offer an estimated 6.3 per cent dividend yield for 2016 in the offering.

Cornerstone investors for the planned IPO, who are to take up as much as 30 per cent of the total deal size, include sovereign wealth fund Oman Investment Fund, Nikko Asset Management and Malaysia's Fortress Capital Asset Management, the prospectus shows.

The Reit will be backed by three office properties in Washington DC, Los Angeles and Orange County, California. Meanwhile, DBS Group Holdings and JPMorgan Chase & Co are managing the offer.

Singapore is one of Asia's leading houses for Reit and business trust listings. The planned IPO brings a breath of fresh air to the Republic's IPO market, which has raised a mere US$33 million this year, compared to US$619 million a year ago, according to Dealogic.

The listing of Manulife US Reit will also offer local investors an alternative from lower-yielding Singapore bonds.

Manulife currently operates in 12 markets, including China, Cambodia, Japan and Malaysia.

This year, the company clinched a deal worth more than US$1 billion, allowing it to exclusively distribute its insurance products through DBS Group Holdings' branches across Asia.